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Interest Rates Rise to 4.25%!

23rd March 2023

 by Adam Sheikh

Bank of England decide to increase the interest rates further.

The Bank of England has increased the interest rates from 4% to 4.25% in an effort to control inflation. This marks the 11th consecutive time that the Bank of England has raised interest rates. The decision was made as recent figures showed a higher-than-anticipated increase in the cost of living. Despite previous expectations that inflation would decrease, it rose to 10.4% in the year leading up to February. The rate hike follows concerns over the stability of the global financial system in the wake of two failed US banks. While this increase in interest rates will make it more expensive to repay mortgages, loans, and credit card debt, it should also result in a higher return on savings.

Richard Donnell, executive director of research at Zoopla in reaction to the news said: “We don’t expect the increase in the base rate to make much difference to the outlook for the housing market. Demand for homes is down on last year but sales are still being agreed albeit at a slower rate (20% lower). People still want to move and households are resetting their plans in an environment of higher borrowing costs. Talk of a big price correction in home values has been overplayed and if you price your home sensibly, it’s likely to attract interest subject to some negotiation on the final price.”